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Monday, February 8, 2010

California's money woes are well known, but it often amazes me how little understood the causes are. Any time the topic arises, any conservative within earshot will shout out the clarion call of those "tax and spend Califor-aye-yay liberal elites!" and how lucky we Utahns are to live in conservative servitude.

But the facts of the matter paint a very different picture. California suffers from a combination of a hamstrung legislature, bound by foolish process rules that give obstructionist ideologues near-veto-power influence over the sausage making process (sound familiar?), and a string of anti-tax pledges and balanced budget mandates (sound even more locally familiar?) that have in effect crippled the state's infrastructure and services. In an article on HuffPo's front page today, Bob Samuels details the history of self defeating legislation, as well as foundation of a mindset most prominent today in the tea party "movement."

We can trace the origin of the current tea party movement to the late 1970s when California led the way to a new form of tax rebellion by passing Proposition 13, which capped property taxes and required that new taxes could only be raised if 2/3rds of the state legislators voted for the increase. Since this time, not only has the limit on taxes reduced the available money for education and other public programs, but this proposition has determined the structure of Californian politics. Republicans in the state have learned that they can be elected to office by simply attacking any hint of raising taxes, and not only are they able to label opponents as "tax and spend" Democrats, but Republicans, who represent a small minority of the voters, have also paved the way for tax breaks for the wealthy and the deregulation of several industries. This anti-tax, pro-business ideology helped to land Ronald Reagan the governorship and later the presidency, and of course, Reagan, gained his conservative credentials by opposing the Berkeley student movement as governor; we are now witnessing a similar opposition between a conservative governor and a progressive student body.

Samuels also explains the growing opposition to this status quo within the student body of Berkely and other universities, which first grabbed my own attention in the form of a student strike in defense of custodial staff. Samuels writes:

In opposition to this anti-tax, anti-government populism, the students, faculty, and unions have been calling for the need to change the way the state votes on taxes and budgets. Led by the Berkeley professor George Lakoff and his California Democracy Act, the UC coalition has been arguing that the state should not be held hostage by the Republican legislative minority that has taken a pledge to never raise any taxes. While no one wants to pay more taxes, students have understood that the recent increase of student fees (tuition) by over 41% in one year is the same as a tax hike. In fact, while the wealth in California has become concentrated at the top, the richest Californians have seen their tax rates lowered. Meanwhile, since the state cannot raise taxes, and it must pass a balanced budget by a 2/3rds vote in both houses of the legislature, the only thing the Democrats can do currently is to cut the funding for education and other vital social services.

While pushing for higher taxes and more state funding may not seem like a radical gesture, the UC coalition has extended its political actions by tying the legislative stalemate to the larger issues of privatization and corporatization. Although the UC President Mark Yudof and the Board of Regents would like the students and the faculty to blame the state for all of the university's problems, the coalition has directed its anger in multiple directions and has effectively criticized both the state and the UC administration. For instance, when students protested the most recent move to raise students fees, they not only called for the legislature to restore the system's funding, but they also protested the regents decision to support compensation increases for top administrators.

While budget troubles in Utah haven't come close to those brewed up by legislative short-sightedness in California, it doesn't take much of a stretch to see the similarities in trajectory.

Feel good anti-tax pledges and running the state government like a business (focusing solely on bottom lines and balanced budgets) isn't governance in the long term. And even businesses have to invest in their own future from time to time. As Utah grows, and the complexities of legislative challenges do as well, our legislators are going to have to accept a harsh reality: in poll after poll, when faced with actually losing the services government can provide -- as opposed to just talking about how much we all hate taxes at rallies and speeches -- voters always choose to pay more to get more. Free market rhetoric, in such scenarios, quickly becomes meaningless rhetoric. "Let me keep my paycheck!" quickly becomes "Hey, why aren't you insuring the bank where I cash my paycheck?!" when it really comes down to it.

Ideology will eventually/always have to give way to pragmatism. Effective governance, and at least a moderate assurance of quality of life and opportunity costs money, and is more dependent on federal and state government than the John Birchers and Patrick Henry Caucusers would have you believe. And it's not really a matter of "if" voters make the realization themselves, but "when."

2 comments:

Don't forget the woes caused by Prop 13. Unlike Utah's smart "truth in taxation" system that pegs revenues, California's system pegs the rate and limits increases in valuation while providing no floor for devaluation. The three-legged stool of sales, income, and property taxes lost its last stable base when that happened.

The bigger problem, though, is Californians' unwillingness to pay for the government they want. Remember, the same people that vote for those supermajority votes on taxes and budgets also keep approving earmark after earmark at the polls in voter referendums. They also completely fail to acknowledge that the price of the commuter society in which they live is a big bill for transportation and that schools with a large number of ESL students are a lot more costly.

I'm all for collecting as little in taxes as is necessary and for sticking to the fundamentals of safety, schools, and streets at the state level. That said, California doesn't seem to want to invest in any of them.

Theirs another interesting observations about how CA's property tax's work. any raise of the property tax is capped at 2% from the previous year so many things that would normally be paid out of property tax increases has to come from somewhere else, in CA a part of the larger state budget is to pay for utility's that in other states would be covered entirely out of city and county tax's. When Arnold and the conservatives went on their slash and burn pillaging of the States budget they cut many city/county governments at the same time creating an enormous amount of animosity towards the the Governator and the republican party in general.

CA hasn't actually elected a super majority(2/3) in both houses yet, however they are likely to next election. And considering whats coming out of the CA Tea party conservatives lately http://www.youtube.com/watch?v=Wo_Ejfc5hW8 I really don't see the republicans making any in roads their anytime soon.